Siemens Said to Plan VAI Metals Technologies Sale to Mitsubishi

April 28 (Bloomberg) -- Siemens AG, Europe’s largest
engineering company, agreed to sell a majority stake in its VAI
Metals Technologies business to Mitsubishi Heavy Industries
Ltd., according to two people familiar with the plan.

Siemens will retain a 30 percent stake in the Linz,
Austria-based division, whose 7,000 employees design, build and
maintain plants for the steel industry, to guarantee future
business relations, said the people, who asked not to be
identified because the matter is private. Oberoesterreichische
Nachrichten newspaper first reported the agreement on April 26.

The unit could be valued at 800 million euros ($1.1
billion), Societe Generale SA analyst Gael de Bray estimated
Sept. 7. Siemens was considering a sale of the division, people
familiar with the situation said in December.

Joe Kaeser, the chief executive officer of Munich-based
Siemens, is working through Siemens’s portfolio before a planned
update on his strategy May 7. That’s when he’ll announce the VAI
sale, the people said. Global steel prices have slumped amid
waning demand from automakers and builders and increased
competition from low-cost competitors in China.

The market for VAI, formerly called Voest-Alpine
Industrieanlagenbau until its 2005 acquisition by Siemens, is
very difficult and opportunities are diminishing, Wolfgang
Hesoun, the head of Siemens’s Austrian operations, said Dec. 16.

Mitsubishi is itself in the midst of adopting a new company
strategy, and formed a fourth pillar of its business dubbed
‘Machinery, Equipment and Systems’ this month. CEO Shunichi
Miyanaga said last year the company needed to expand its product
offering for the iron and steel manufacturing industry by
growing its service network and adding new production bases.